Most books that I don’t ask for are lousy.? This one isn’t, and I love the title, because it indicates the long hard slog that it is to persevere in investing. IT IS A BUSINESS!!? Without hard work it will not yield good results.? Indomitable means persistence, and a lack of persistence will give a bad result.
Steven Sears has been a columnist for Barron’s for many years.? He has read a lot of analyses, and written a lot of columns.? In this book he attempts to explain why many investors are the dumb money that clever investors profit from.? Or, why many investors get sucked dry by brokers, funds with high loads, other illiquid investments, etc.
There is a constant in investing and it frustrates me, because I try to educate retail investors.? People panic as a crisis unfolds, and they sell near the bottom.? Conversely, people buy as a trend nears its peak, because they conclude that they have missed out.
What would it take to educate these people, which are many among us?? Losses for one.? Second, a willingness to read historical finance, which few will do, because it doesn’t seem relevant.? If you will not learn from history, you will not learn.
As is sometimes said, “Wise men learn from the errors of others.? Average men learn from their own errors.? Dumb men never learn.”
Financial markets have more than their share of average and dumb men.? They get fleeced, and rapidly.? That dichotomy is key to investment markets.? Think about it — if you were going into a war, would you spend more to make sure you had the best armaments?? I think you would.? If so, why do you go virtually undefended in contention against Wall Street?
There are two ways to do this.? First, go passive and index.? Safe, reasonable, good.? Second, do a lot of research and find managers that eat their own cooking (like me), and invest with those that have a good long-term track record.? They should be managers with fixed principles regardless of the environment.
What it gets right
More data does not mean things are better.? For most people more data confuses them.? Giving long explanations in prospectuses is a hindrance for most, not an aid.? Maybe there should be a law that says, “Prospectuses can only be 1000 words long.? If you can’t get the risks in that amount of words, you deserve to be sued.”
It takes three years for the average investor to note that the trend has changed.? Is there any surprise then about “dumb money?”? Would it get any better if we told them this?
Quibbles
Ted Benna was a benefits consultant, not a tax consultant (P.5). Maybe they were the same back then.
Regarding Diogenes, he was a skeptic, and did not believe that there were any honest men.? That’s not a bad way to view Wall Street, butthat was not the sense I got from this book.
The author makes a lot out of calender anomalies, bu most of the research I have reviewed does not support them.
He makes a lot of the ISM, but if you aggregate his numbers, they seem higher than market returns have been over the the last 80+ years.? I find the data questionable.? Maybe he didn’t correctly describe what he cited, or maybe those he cited deceived him.
If you can discern consumer spending trends in advance of the market, you will do well, but can you do it?? This is a non-insight.
At the end of the book, page 195, he asks for new relative measures of risk.? If only it were that simple.? We all wish we had those.? They change over time, and asset classes may shift in relative riskiness due to overvaluation.? Oh to have bought bonds in 1987, and in 2000. Oh, to have bought equities in 1982, 1995 and 2003.
Who would benefit from this book: If you ae willing to be patient and following long-term strategies (like me) you might benefit from this book.? It is only meant for those willing to take a long-term view, because it tends to work.? If you want to, you can buy it here: The Indomitable Investor: Why a Few Succeed in the Stock Market When Everyone Else Fails.
Full disclosure: This book was sent to me without me asking for it.
If you enter Amazon through my site, and you buy anything, I get a small commission.? This is my main source of blog revenue.? I prefer this to a ?tip jar? because I want you to get something you want, rather than merely giving me a tip.? Book reviews take time, particularly with the reading, which most book reviewers don?t do in full, and I typically do. (When I don?t, I mention that I scanned the book.? Also, I never use the data that the PR flacks send out.)
Most people buying at Amazon do not enter via a referring website.? Thus Amazon builds an extra 1-3% into the prices to all buyers to compensate for the commissions given to the minority that come through referring sites.? Whether you buy at Amazon directly or enter via my site, your prices don?t change.
China’s first bond default could be good market medicine http://t.co/8ShFniYM Bond trader: “We don’t really have a credit risk culture.” $$ Mar 31, 2012
Is China’s slowdown worse than previously estimated? http://t.co/CkZw8tLK Could b business conditions that are worst since 2009. $$ Mar 31, 2012
China Banks Said to Underestimate Local Government Risks http://t.co/qpPicyEe China has a clever bureaucracy; always has; big CYA $$ Mar 25, 2012
Chinese capitalism is just another knockoff http://t.co/w2hSozQL China is not Capitalist; it rewards Party members, not citizens. $$ Mar 25, 2012
Debating a ?Hard Landing? http://t.co/NMnYk2XX friendly debate – Andrew Batson & Patrick Chovanec over China facing a ?hard landing? in 2012 Mar 25, 2012
I Am Jordan’s Complete Lack of Surprise: Chinese Co’s Forced to Falsify Data http://t.co/BMj7ux0T Command & control economy, not free $$ Mar 25, 2012
Market Dynamics
The Nature of a Crowded Trade http://t.co/sf1phJjP A July 2008 article of mine where I reflected on the high correlations of the prior 3 yrs Mar 31, 2012
A Market Lacking Diversification http://t.co/khXUVjaL Correlation conditions similar to 2006-2008, only diversifier hi-qual long bonds $$ Mar 31, 2012
Pension Deficit for 100 US Company Plans Increased 41% in 2011 http://t.co/FdIZTltW Low long hi-qual rates & cruddy returns on risk assets Mar 31, 2012
2277 Stocks and Still Not Diversified? http://t.co/iu0Pw8Ty Recommended solution is similar 2a levered version of the Permanent Portfolio $$ Mar 31, 2012
New from Aleph Blog The Rules, Part XXXI: The offering of liquidity through limit orders is a real service to th… http://t.co/ZiuzWIo5 Mar 30, 2012
Passive Aggressive: Index-Linked Securities and Individual Investors http://t.co/ZrjMCKCz Curbs stock picking, encourages factor timing $$ Mar 29, 2012
Bankers are telling corporate clients this is their chance to refinance http://t.co/Eh9tHEX6 The window of cheap junk financing is open $$ Mar 28, 2012
New from Aleph Blog Replacing Defined Contributions: I think that it is pretty certain that defined contribution… http://t.co/Dis34ql2 Mar 27, 2012
What Will Replace the 401(k)? http://t.co/miLAuoYc How about DB pensions where it depends on how much the employee kicks in plus match? $$ Mar 27, 2012
US Stocks Advance Following Bernanke?s Comments http://t.co/D7sORuIU Stox react 2 increases in inflation expectations. TIPS & Bonds fall $$ Mar 26, 2012
Hedge Funds Capitulating Buy Most Stocks Since 2010 http://t.co/XHwxzxNO Short-term money alert! Will propel mkt 4 a while, then… $$ Mar 26, 2012
If Bloomberg Business Week is a better magazine than old Businessweek (I think so), what magazine should we use now 4 a dumb $$ indicator? Mar 26, 2012
Asset Management
Nontraded REITS should be a nonstarter for clients http://t.co/O1ZuMvX8 And here’s one that just announced a 72% loss: http://t.co/la8d29my Mar 31, 2012
Oaktree IPO Could Pay 2 Founders $117.2M Each http://t.co/Yufla6Jk The Most Important Thing is getting rewarded 4 building AUM 😉 $$ Mar 31, 2012
The Trouble With Exchange Traded Notes http://t.co/ZL7dVpjO Unsecured credit, total return swaps, low level of regulatory protection $$ Mar 31, 2012
Good 4 all of us RT @frankvoisin: My interview Research Magazine’s April issue: http://t.co/zioono6R Also features @VitaliyK @alephblog $$ Mar 30, 2012
Bain Gave Staff Way to Swell IRAs by Investing in Deals http://t.co/4LlAExBt Letting employees in on the fun shares the wealth. Good $$ Mar 30, 2012
Lying By Omission: Mutual Funds, Track Records & Departing Managers http://t.co/4MUyNRYs Track recrds shuld b suspended when critical ppl go Mar 29, 2012
New from Aleph Blog A Pox on Promoted Stocks (2): By this time, I would think that it would be worth the the tim… http://t.co/DJkH6E4W Mar 28, 2012
The Measured Approach to Value http://t.co/XiZOUMOn Features investors Vitaliy Katzenelson & Croft-Leominster, & smaller Frank Voisin & me Mar 28, 2012
GoodHaven Realizes Its Vision http://t.co/zJVmCFMa The CIO of Markel, Tom Gayner showed them favor and invested with them. Good for them. $$ Mar 27, 2012
What This Industry Needs is a Good Disruption http://t.co/imKDcElR There r a few areas of the financial industry that justify their fees $$ Mar 27, 2012
Found PDF slide presentation: http://t.co/0GfhME7m The Market for Financial Advice: An Audit Study $$ Worth a read, paper not free @ SSRN Mar 26, 2012
Treasuries Rise for Fourth Day on Global Growth Concern http://t.co/JYpanHTu Funny how the sentiment has reversed; who is surprised? $$ Mar 25, 2012
Monetary Policy
@kyles09 No, not a believer in MMT, MMR, or neoclassical macro. 2 much aggregation, not everything happens at once, goods/services central + Mar 30, 2012
@kyles09 and $$ only facilitates goods/services. Debt is important, but not central, some goods owned outright, w/no liabs. Money is a + Mar 30, 2012
@kyles09 creation of a culture, not the government, because @ the edges, FX & commodities will crowd out bad currencies. MMT -> inflation $$ Mar 30, 2012
What Does Bernanke Know? http://t.co/LydpOqk1 Introduces “The Guy Rate” http://t.co/zNVeUYmP Unemployment of older guys has hi costs Mar 29, 2012
Demand for U.S. Debt Is Not Limitless http://t.co/NWKHcpCD In 2011, the Fed purchased 61% of Treasury issuance. That can’t last. $$ Mar 29, 2012
For the last tweet, those r2 good articles by Simon Johnson & James Kwak, authors of ?13 Bankers? & co-founders of The Baseline Scenario $$ Mar 28, 2012
Housing bubbles and interest rates http://t.co/9TfzMpt2 Makes my point that asset price levels should be part of monetary policy $$ Mar 31, 2012
Banking & Finance
FiveBooks Interviews > @Ritholtz on Causes of the Financial Crisis http://t.co/RQQZfHTz Many good perspectives from 6 authors on the crisis Mar 31, 2012
Geithner?s Math Puzzle Beyond Numbers for DeMarco http://t.co/Eg9BjcgE Principal forgiveness would have moral hazard impacts. $$ Mar 30, 2012
Why not make LIBOR off of binding offers of the banks to borrow/lend to any of their group $10M short-term unsecured? Avg — LIBOR/LIBID $$ Mar 30, 2012
Libor Links Deleted as UK Bank Group Backs Away From Rate http://t.co/HOy8TOof British Bankers? Association distances itself from LIBOR $$ Mar 30, 2012
Branson?s Virgin Money Seen Disrupting U.K. Retail Banks http://t.co/bPcD8im7 Always been a Branson skeptic; he have audited financials? Mar 30, 2012
Why not make LIBOR off of binding bids/offers of the banks to borrow/lend to any of their group 10 million dollars sh? http://t.co/wK3HyopV Mar 29, 2012
Is Hartford Financial’s market exit a death knell for the annuity crowd or just more Hartford haplessness? http://t.co/AUEVqxWQ Both. $$ Mar 29, 2012
The Birth (and Death) of the Moral Age of Wall Street http://t.co/eStszd7i At one point the moral code of $GS had some meaning, not much now Mar 29, 2012
@BarbarianCap More subtle than that; for insurance accounting &the concept of release from risk, it is the conservative side of realistic $$ Mar 27, 2012
A Proposal for the Resolution of Systemically Important Assets and Liabilities: The Case of the Repo Market http://t.co/WYQGAVVx +1 $$ Mar 26, 2012
But, disagree. Would b simpler and more effective to disallow repo financiers unrestricted access to collateral even in counterparty default Mar 26, 2012
Obama Relies on Debt Collectors Profiting From Student Loan Woe http://t.co/pYWwgLq2 How independent debt collectors get people 2 pay $$ Mar 26, 2012
A Bailout by Another Name http://nyti.ms/GRTNMM GSE writedowns would constitute a direct & sizable gift from taxpayers 2 the largest banks Mar 26, 2012
Banks? preemptive strike against Dodd-Frank http://t.co/wjHW0nyv Banks adjusting strategies in order to keep doing as much biz as possible Mar 26, 2012
MF?s Corzine Ordered Funds Moved to JP Morgan, Memo Says http://t.co/cYaT9sHy The most likely cause may prove to b correct $$ #corzine Mar 26, 2012
BOE’s Tucker: Rehypothecation Consequences ‘Under the Radar’ http://t.co/0X8ZQMMH Good. Rehypothecation should b reviewed, perhaps limited Mar 26, 2012
@EpicureanDeal @dsquareddigest I would still lay the blame @ the door of $GS mgmt. Could have grown via retained earnings &stayed private $$ Mar 26, 2012
@EpicureanDeal @dsquareddigest Also, there r real advantages 2 partnership culture in an investment bank; risk control works a lot better $$ Mar 26, 2012
The Age of the Shadow Bank Run http://t.co/deJRQGgy Borrow short, lend long; clip a spread. Surprise! During the crisis you lose big! $$ Mar 25, 2012
The Interest Rate Swaps that Are Bankrupting Local Governments http://t.co/yHQZ1r3u Not true. Gov’ts tried to minimize taxes w/swaps, failed Mar 25, 2012
Three?s a Crowd http://t.co/KHtbrqpe Disagree w/the conclusion, because $GS did not have to go public; problem is mgmt, not shareholders $$ Mar 25, 2012
Pensions
Brazil?s pension system http://t.co/90O97tQ4 They allow people to retire too early & offer too much. More unsustainable than Medicare $$ Mar 30, 2012
@AlexRubalcava Perhaps a cash balance plan would do that. DB plans are not expensive because of explicit costs. They r expensive b/c + Mar 28, 2012
@AlexRubalcava during boom times benefits look free and get set too high, leading to high costs in the bust phase & plan terminations. $$ Mar 28, 2012
Politics
Obama Is a Loser Who Wins, Like FDR in 1936 http://t.co/K0x9go0T Don’t assume a bad economy insures the defeat of Obama. FDR won in ’36 $$ Mar 31, 2012
The Rejection of Austerity Begins http://t.co/CgWKa9x6 Until failure, ppl vote 4 politicians who promise magic prosperity thru govt fiat $$ Mar 30, 2012
Germany: The Final Frontier… Whose True Debt/GDP Is Now 140% http://t.co/KgW2d76E When you add up the guarantees, doesn’t look so good. $$ Mar 29, 2012
Justices Suggest Parts of Health-Care Law May Be Thrown Out http://t.co/cMvKHR20 B best 2 throw the whole law out; let Congress start over Mar 29, 2012
Contra: Court Can?t Let Broccoli Get in Way of Health Care Law http://t.co/5Yp2o8tB Sup Ct is moving 2 define interstate commerce better Mar 26, 2012
Death Tax Defying http://t.co/FrkL5yLB Eliminate the estate tax; Tax everyone on unrealized capital gains. $$ Same result. Mar 25, 2012
Intelligence community can keep data on Americans with no ties to terrorism for up to 5 years http://t.co/PCM7ldiG Stinks; call the ACLU $$ Mar 25, 2012
US Economy
Why Natural-Gas Prices Could Fade to Red http://t.co/GApb0xie When everyone tries 2 frack @ once, there is too much natgas, price falls Mar 30, 2012
US coal production declines as industry faces further stress http://t.co/l3WpZtDC Fracking has unpredictable consequences; affects energy $$ Mar 29, 2012
Bidding Wars Erupt as U.S. Supply of Homes for Sale Falls http://t.co/JsgIdewr In certain locales, & on the low end, there r bidding wars Mar 29, 2012
The Biggest Bellwether In The World Is Giving Some Ominous Comments About Growth http://t.co/vHWs9lwB $FDX says things r slowing down $$ Mar 29, 2012
Planned Pipelines to Rival Keystone XL http://t.co/qQZ1Dsj2 Enterprise Products Partners & Enbridge may build competing pipelines $$ Mar 28, 2012
‘Pink slime’ producer suspends operations http://t.co/CvptYPhU Goes from 4 factories to 1. 600 people will probably lose their jobs $$ Mar 28, 2012
@valuewalk @The_Analyst It is better for students to start small businesses. Forget economics, it is a waste. Profit/loss best teacher $$ Mar 27, 2012
The Economic Surprise Index is now trending down http://t.co/eJCEEdvy @soberlook reminds us that not everything is going well $$ Mar 27, 2012
Miscellaneous
Like it? I’ve actually bought cars that way! RT @mprobertson: http://t.co/UHdFL0Eu How to buy a car using game theory. very interesting. $$ Mar 31, 2012
Eating Chocolate Regularly May Make You Leaner, Survey Suggests http://t.co/l8c6MMpA This means one dark chocolate Dove promise/day $$ Mar 27, 2012
The second most dangerous people in the world are smart people with wrong postulates. Mar 25, 2012
The most dangerous people in the world are politicians who peddle the views of the smart people with wrong postulates. $$ Mar 25, 2012
Madoff FBI Files Reveal How He Fooled His Own Employees http://t.co/lmq2AoZG Gives hope to those accused; Madoff controlled data tightly. Mar 25, 2012
Been using FRED since it was a bulletin board in 1991. Great job, FRED team! http://t.co/kksvwllM Mar 24, 2012
The Villain http://t.co/yYReRb4r On Bernanke, the man who expanded the power of the Fed far beyond constitutional limits, if there r any $$ Mar 24, 2012
Bernanke Sees Need for Higher Household Spending to Fuel Growth http://t.co/3LQUTGji Yes Ben, we will spend more while we are inverted $$ Mar 24, 2012
Fed?s Evans Calls for Stronger Commitment to Low Rates http://t.co/vSKfU36q Read paper; don’t buy it. ARIMA, no out of sample tests $$ Mar 24, 2012
That crisis created a very sharp move up in rates http://t.co/jfNAVN3o $$ Mar 24, 2012
Bernanke: the man, the legacy and the law http://t.co/zA7OeFc4 ?courts have shied away from developing jurisprudence on monetary policy.? $$ Mar 24, 2012
@fatdaz It is my firm belief that no economic entity can dominate entirely; central banks have been destroyed b4; will happen again $$ Mar 24, 2012
Masters of the Universe Start to Challenge Ben Bernanke http://t.co/31Pr1yrQ Markets are more powerful than Central Banks, watch out Fed! Mar 23, 2012
European Banks Would Have Passed Fed?s Stress Test http://t.co/z5bCBeYy Ultimate insult 4 stringency of Fed’s stress tests $$ #devildetails Mar 20, 2012
Bernanke Stands to Gain Capital-Market Experts With Nominees http://t.co/oX8xOdEU We need some people that doubt neoclassical economics $$ Mar 20, 2012
Bernanke Returns to Academic Roots to Justify Fed?s Existence http://t.co/ORfma5sE Safe audiences let him talk publicly w/little risk $$ Mar 20, 2012
Federal Reserve Stress Tests Make Us All Muppets http://t.co/CQu827KD Ignores E-Zone contagion, increase in int rate volatility, etc $$ Mar 19, 2012
Bernanke: “I Want to Bring Back Irrational Exuberance” http://t.co/p0qlQwXe @brucekrasting on overheating in some debt asset classes $$ Mar 19, 2012
China
Ai Weiwei: ?You?re There but You?re Not Existing? http://t.co/d7mLxHXm RARE interview w/Ai Weiwei, describing his detention in China $$ Mar 24, 2012
China?s stock-market supervision suffering http://t.co/QEBPC5ya “Understaffed securities regulator, weak legal system cited” $$ #nosurprise Mar 21, 2012
@Roy_Cam They can’t make money b/c of overcapacity; China invested too much in steel & global growth stinks. US exports of steel r rising $$ Mar 20, 2012
@Roy_Cam We only import 30% of steel used in US, 4% of which comes from China = 1.2% of steel used is from China http://t.co/FTWt80oa $$ Mar 20, 2012
@Roy_Cam You are right there, and that’s one reason why profitability is declining in steel industry globally. $$ Mar 20, 2012
China to increase fuel prices 6-7% http://t.co/dBwrepDj Pump prices at record highs; biggest rise since June 2009 #ouch $$ Mar 20, 2012
Sad Industry Mantra: Make Steel, Lose Money http://t.co/Pu9e6qFj Insanity; doing same thing, expecting different results. Future bailout $$ Mar 20, 2012
The State-Owned Enterprises of China http://t.co/55nvgUMs I think a “big bang” would work, but the Communist Party would never do it $$ #Mao Mar 20, 2012
Chinese property *alert* http://t.co/eklWzXkU Property sales value contracted 20% year on year in the two months ending in February. $$ Mar 20, 2012
China’s new home prices “no longer rising” http://t.co/UL4T3yzQ The Chinese Gov’t always gets what it wants, until it gets too much of it $$ Mar 19, 2012
Chinese Companies Forced to Falsify Data, Government Says http://t.co/tH0MUiYn AN example of why I don’t trust Chinese economic data. $$ Mar 18, 2012
@Xiphos_Trading Don’t know if there will be a crash or not, but there has been a lot of malinvestment in China, like Late 80s Japan $$ Mar 18, 2012
Europe
Those Catchy Spanish (Yield) Curves http://t.co/qoGmGl7E Yields backing up in the Spanish bond market; this could be the next crisis $$ Mar 24, 2012
Euro-Zone Banks Get Show of Faith http://t.co/ZWqd8Df5 US MMFs begin adding back yieldy E-zone bank CP $$ #wedontlearnwereallydontlearn Mar 24, 2012
On second thought, hold off moving that business to Ireland http://t.co/Bdu6ezon Ireland heading into recession; possibility of default? $$ Mar 23, 2012
@Mapsofworld Gun to the head, I think it fails entirely, but that opinion is not held with high probability $$ Mar 22, 2012
@Mapsofworld If the E-zone doesn’t move 2a full fiscal union, the Euro will either fail entirely, or become the currency of a smaller group Mar 22, 2012
The Safe Haven of the Nordic Currencies Is No More http://t.co/FquH5ZWW It’s a little early to get categorical about this $$ Mar 21, 2012
A Wall St. Firm Advises Greece, With Discretion http://t.co/Y12GeNZq $BLK is one powerful firm that many govts in crisis turn 2 4 help $$ Mar 21, 2012
Swiss Secrecy Besieged Makes Banks Fret World Money Lure Fading http://t.co/qV197Px1 What good r Swiss banks if no secrecy, tax evasion $$ Mar 20, 2012
Germany on a Different Track http://t.co/Gl3BNXBA While Much of EZone Deals W/Busts, Property Prices r Rising in Berlin, Hamburg, Munich Mar 20, 2012
Rest of the World
Israel Billionaires Put Own Interest Ahead of Holders http://t.co/QSTpBn6E What’s mine is mine; what’s yours is negotiable $$ Mar 24, 2012
Late Shah?s Son Selected As Iran?s Person Of The Year http://t.co/phWmAFRQ This is VOA so take it w/a grain of salt; still funny 2thinkabout Mar 24, 2012
Latin American Nations in Worse Shape for Crisis, IDB Says http://t.co/zlZvDJi4 “result of lower budget surpluses b4 interest payments” $$ Mar 20, 2012
What is the real rate of interest telling us? http://t.co/Vbk13I02 Excess capacity in devel world post bubble pop, send cap 2 emerg mkts Mar 20, 2012
Insurance
@CflGator Life companies should be simple, but product design exploded to the point where reserving can’t keep up; I own only 1 life co. Mar 24, 2012
@CflGator Variable & Universal life products have secondary gtee issues; there r a variety of long dated term products w/rsv issues $$ Mar 24, 2012
@CflGator and P&C insurance — life insurance is capital intensive; they are sticking with their simplest biz, aside from long-tail P&C $$ Mar 24, 2012
@CflGator It really depends; they wrote a lot of complex life products. On the bright side, a company in runoff is a cash cow. $$ Mar 24, 2012
@CflGator That’s the tough Q. $HIG offered significant secondary guarantees when they were the #1 annuity writer. May not b prop reserved $$ Mar 21, 2012
Hartford Shares Jump On Split, Analysts Like It Too http://t.co/APFbv4UA Not so fast on $HIG; regulators must approve a split; c my cmmt Mar 21, 2012
Should Hartford?s Annuity Holders Be Worried? http://t.co/HfuZO3QO Probably not; small annuitants have protection from guaranty funds $$ Mar 21, 2012
Annuity Case Chills Insurance Agents http://t.co/rHkg68Lw I’m always skeptical of products w/high commissions & surrender charges $$ Mar 19, 2012
Fixed Income
Why Fixed Income Funds May Fall Short http://t.co/cHmF3hOj On the difficulties of combating tracking error in fixed income ETFs. $$ Mar 24, 2012
Top Junk Pummels Treasuries for Safest Profits http://t.co/E5vl2qHB That’s the rearview mirror; will be harder to squeeze more returns out Mar 21, 2012
The differentiation of Agency MBS risk profiles http://t.co/IJN2mbCm Interesting to see long avg life on high coupon underwater mortgages $$ Mar 21, 2012
Bond Bear Market Yet to Roar http://t.co/oNENX9jc The selloff has been piddling so far, has not affected equities, & it may reverse $$ Mar 21, 2012
Do High Yield Bonds Know Something Stocks Don?t? http://t.co/986Evuok Equities & Inv Grade corps outperforming HY Corps- call provisions? $$ Mar 19, 2012
RE: @thearmotrader Thanks, you did the post that I wanted to do.? Now I just have to point to it. http://t.co/Ru22nvom Mar 19, 2012
Exchange Traded Products
“@HerbGreenberg mentions that once the creation/redemption mechanism ?breaks? (my word, not his), that the ETF/ETN sh? http://t.co/jxK0bZfX Mar 23, 2012
RE: Not likely, but maybe.? If they were forced to see that they were getting a negative (or very low positive) yield? http://t.co/nnxLt2oj Mar 23, 2012
Exchange-Traded Notes Are Worse Than You Think http://t.co/FAO4IS3H Path-dependent fees, shadow NAVs, high fees, tracking error, credit risk Mar 21, 2012
Who Uses Leveraged and Inverse ETFs Anyway? http://t.co/cYpkVMr5 Retail owns 80%+. Normal ETFs r mostly held by institutions $$ Mar 21, 2012
Know Your Client ? Leveraged ETF Version http://t.co/gqPtiZtF Doesn’t matter if leverage is internal or external, client needs come first $$ Mar 21, 2012
Money Managers Serving Clients First, Ego Second http://t.co/gY9bd1iR Using the investment vehicles of competing firms — a good thing $$ Mar 21, 2012
RE: @finadd “Our results indicate that the extensive purchases of risky private-label mortgage-backed securities by t? http://t.co/cn5TM1cR Mar 20, 2012
@amy_calistri at the levels implied by the CEF pricing at some funds, it would shave the yield 3% $DHF $MAV $HIX, 5% $PHT, 12% $PHK $$ Mar 19, 2012
@amy_calistri Right. I watch the premiums on credit-sensitive CEFs as a measure of frothiness. If the underlying at some HY CEFs were bot + Mar 19, 2012
Anybody know what was up with $EFT today? Floating-rate loan CEF up 4%+, Closed near par last Friday… odd. $$ Mar 19, 2012
‘Junk’ ETFs: Tread Lightly http://t.co/lXftKjwB Check the Price vs the NAV before you buy; also, if w/ds start, index bonds will get hit Mar 19, 2012
Individual Equities
Leon Black?s Bid Gets No Respect as Great Wolf Surges http://t.co/kqS6pNyU Used 2call this stock “little dog;” badly managed frm beginning Mar 24, 2012
@merrillmatter Bezos is scary-smart. I don’t own $AMZN either $$ Mar 21, 2012
Just watched it. Wow, very impressive RT @merrillmatter: Skynet shall be renamed SkyBezos — Order Fetch http://t.co/6l9R9bHn $$ Mar 21, 2012
+1, ugh RT @abnormalreturns: [post] America officially ran out of good corporate names today. http://t.co/lLGEmeAB $ABT $KFT $AAPL $NKE $MCD Mar 21, 2012
You’re on a roll today @merrillmatter: @AlephBlog soon our robot overlords will deliver our bread and circuses to us in the Bezos Colosseum Mar 21, 2012
No RT @merrillmatter: @AlephBlog I want to start a consultancy that veto’s stupid company names. Would your anti-consultancy veto that? 🙂 Mar 21, 2012
Amazon Wrings Profit From Fulfillment as Spending Soars http://t.co/McHUqMhe Tough work 4 laborers, though. $AMZN pushes pretty hard $$ Mar 21, 2012
Kraft to Be Renamed Mondelez After Grocery Unit Is Spun Off http://t.co/GONE6x47 Pronounced ?Mohn-dah-LEEZ.? Sigh, who got paid 4 this? $$ Mar 21, 2012
The 400% Man’s New Big Bet http://t.co/33rHut9y Implicitly a bet that $BRKa will always be able to buy back stock @ 1.1x book value $$ Mar 21, 2012
In a Major Restructuring, $HPQ To Combine Printer and PC Groups http://t.co/Aj3zaKaY FD: +HPQ; seems like a marginal idea, maybe works $$ Mar 20, 2012
Why $HPQ Really Needs A CEO Succession Plan http://t.co/hkPDVkAy Good cultures should promote from within; HP used to have that $$ FD: +HPQ Mar 20, 2012
Buffett Message Is ?Do as I Say, Not as I Do? http://t.co/Gcblc8oZ Alice Schroeder very acidic on Buffett; half right & half wrong $$ Mar 20, 2012
$AAPL to Pay Dividend, Buy Back Stock to Return Some of Cash http://t.co/uxf6jEBP About time, if there aren’t opps 2use the $$ Mar 19, 2012
Money Market Funds
@MarcHochstein Thanks, I found the CFA Institutes comment today, and their view is similar 2 mine in some ways: http://t.co/8yPLcXfX $$ Mar 22, 2012
@MarcHochstein investment restrictions moved back to 2008 norms. The ability 2 have credit events frees MMFs to pursue best advantage $$ Mar 21, 2012
@MarcHochstein My idea will work 4 MMFs using inv policies prior 2 2008. The MMF folks aren’t earning $$ now, but they could with + Mar 21, 2012
@MarcHochstein After reading this: http://t.co/aUoaN4kb Ask them, what if you traded Merkel’s idea 4 a loosening of investment rules? $$ Mar 21, 2012
@MarcHochstein 1 more thing; if they have any sympathy toward my idea, I live near DC & would be willing to testify to the SEC $$ Mar 20, 2012
@MarcHochstein Does that help? I still think my proposal, one of the few compromise proposals out there would work best of all. Mar 20, 2012
@MarcHochstein Having been a life actuary, most regulatory progress happens when actuaries talk w/smarter regulators & forge compromise Mar 20, 2012
@MarcHochstein Does that help? MMFs are just saying “We r fine, nothing needs 2b done.” 2me that strategy prob loses. Mar 20, 2012
@MarcHochstein Would ask them if they have any way of stopping MMF runs on a private basis; this is the SEC goal; solve that, they leave Mar 20, 2012
@MarcHochstein More humbly, I would ask them if they really think they can beat the SEC. SEC’s proposal is horrible, but saying “no” loses Mar 20, 2012
@MarcHochstein Not so humbly, I would ask that u show them my proposal that I sent to the SEC, & ask them to back it http://t.co/vuNL8tQE Mar 20, 2012
Market Dynamics
The Easy Money’s Been Made, Four Reasons for Caution http://t.co/9kAXqEU4 E-zone calm, risk tolerance+ , VIX low, FOMC may move soon Mar 24, 2012
?and then all of a sudden, THE BULLS WENT BERZERK! http://t.co/bJKCVJha Lots of bullishness out there, though Howard Marks thought otherwise Mar 21, 2012
@byrneseyeview That’s true, & I did a presentation on that. One more complicating factor were financials, which looked cheap but weren’t $$ Mar 21, 2012
@byrneseyeview Found it. Here: http://t.co/YupRW6yD It’s on a number of topics; it was well-received $$ Mar 21, 2012
Contra: The Biggest Bubble You’ve Never Heard Of http://t.co/0tzkPyiA Value can’t b a bubble. Growth can b a bubble. Growth & ROE meanrevert Mar 21, 2012
Is this time really different? http://t.co/eePs0aIV It’s never different. It’s always different. Profit margins will mean-revert; Q is when Mar 21, 2012
Biggs boosts bullish bets on stocks to 90% net long http://t.co/5fYQDhUC Won’t be the first 2 say this, but makes me doubt the rally $$ Mar 21, 2012
The Ax is Back http://t.co/B1j3f7nH @reformedbroker Reduced profits on Wall Street translates into reduced perks, bonuses & jobs $$ Mar 21, 2012
Public Companies: The End Is Near http://t.co/KejHwYDu There r still advantages 2being publicly traded, but has eroded since Sarbox, etc $$ Mar 20, 2012
S&P 500 Rises to Four-Year High as Apple Plans Dividend http://t.co/RnBf9yEw $AAPL raises the div yld on the S&P 500 by 0.08%. Big! $$ Mar 19, 2012
Shares and shibboleths http://t.co/CspyJCNX The equity premium over a diversified portfolio of investment grade bonds is ~1%/yr IMO $$ Mar 19, 2012
Hubble, Bubble, Index Trouble http://t.co/2q3CPx4g Been saying this for years, indexing changes market dynamics, what happens @ reversal? $$ Mar 18, 2012
Politics
Why Are Your Neighbors Just Like You? http://t.co/0lcPOuLZ On the demise of really knowing your neighbors; we try 2 reach out; few others do Mar 24, 2012
@traderscrucible @interfluidity My blog (& Steve’s) have always had a strong public policy emphasis. Dreaming, but we suggest better policy. Mar 23, 2012
Agent Based Models http://t.co/0etJ20fL “Why not keep it simple, and just say, you pay an asset tax for every dollar over $100B?” $$ Mar 23, 2012
The Warren Buffett Chain Letter http://t.co/31FFSrmm Draconian adjustments. What Buffett did & didn’t say. 3% deficit ejects Congress $$ Mar 21, 2012
Migration of sovereign debt from private hands to public institutions http://t.co/rQbDTXg3 &the debt sits til liquidity is needed -> crisis! Mar 21, 2012
To Stay On Top, The US Must Invest In Research Universities http://t.co/P4kyUqY0 FD: + $INTC; do it w/yr own $$ not taxes; c my comment Mar 20, 2012
RT @BarbarianCap: “cnbc: California Cities Scrambling to Avoid Becoming Insolvent” > the die was cast years ago; clowns, path depende … Mar 20, 2012
Stopping the National Debt: A Movement Led By a Cowboy, a Colonel, & a Citizens’ Cavalry http://t.co/frqAXCpy Natl Debt Relief Amendment Mar 20, 2012
Who is REALLY paying in the $25bil TBTF mortgage settlement http://t.co/T2h1B5CO $5B from banks, rest MBS holders eg pension plans, insurers Mar 19, 2012
The JOBS Act: Plutocracy in Action http://t.co/Fjo3Ppet Another article on the previous topic; don’t downgrade information quality $$ Mar 19, 2012
Small Biz Jobs Act Is a Bipartisan Bridge Too Far http://t.co/AwBXg184 Would not mess w/securities laws in that way to create growth $$ Mar 19, 2012
Public Unions Send Medical Bills to Taxpayers http://t.co/Lb2XgAv9 CA Sup Ct foolishly makes healthcare nonreducible. CA will die $$ Mar 18, 2012
As Unions Lose Their Grip, Indiana Lures Manufacturing Jobs http://t.co/vj177CT2 Like my article that few like http://t.co/WgdN7Mmq $$ Mar 18, 2012
Pension Legislation Could Cut Contributions, Hike Taxes http://t.co/Tj1UlUz8 Stupid proposals that weaken DB pensions, companies r strongnow Mar 18, 2012
Regulation
Where is the Center for Audit Quality When We Actually Could Use It? http://t.co/jWt09bcw JOBS Act: destroy info reliability to create jobs Mar 23, 2012
Fed?s Fisher Says ?Too-Big-to-Fail? Problem Remains http://t.co/eLvHGmXt Richard Fisher favors breakup of the biggest banks. $$ Mar 21, 2012
@carney just read your piece on the net capital rule. Similar to my piece last November http://t.co/tl28NPku Good piece. $$ Mar 21, 2012
Top Court’s Patent Rejection Alarms the Biotech Industry http://t.co/oK11WlvR ’bout time we forced a more fundamental review of patents Mar 21, 2012
Economics
Solar?s 80% Plunge Hurts Utilities From Hawaii to Spain http://t.co/m9eACVTp Overcapacity drives down prices of PV panels for now. $$ Mar 21, 2012
Mean Time Between Failures http://t.co/zkT0z9cX The “recovery” is getting long in the tooth, eg it may end soon; graph: http://t.co/xOHA1IYA Mar 20, 2012
Obama?s tax hikes threaten a new US recession http://t.co/uNHwBpeJ Looking @ 4 more years of divided govt & stalemate $$ #debtbombgrows Mar 20, 2012
@The_Dumb_Money I would have liked to see the Banks/Etc. who owned the servicers bear more of the cost $$\ Mar 20, 2012
Partial equilibrium intuitions about choice http://t.co/215kIrmS @interfluidity more difficult to solve general equilibrium Qs than partial Mar 19, 2012
Understanding the New Price of Oil http://t.co/TaMTaneR No surprise here; most cheap oil has been found, the price of oil should rise $$ Mar 18, 2012
Miscellaneous
@merrillmatter Factoid: 100,000,000,000 to 1 for a monkey to type the word “banana” from random typewriter jumping Mar 21, 2012
Is a Calorie a Calorie? http://t.co/4hyTfSvr Yes, but different nutrients come w/calories. Also, a unit of fat has 2x cals vs carbs/protein Mar 21, 2012
Madoff’s Lament: I Was An Honest Money Manager Once http://t.co/OGp2xRHR The outside world should ignore Madoff now. Attention feeds him. Mar 21, 2012
On Slime and Water http://t.co/8iezy0FK Pink Slime in burgers, and shortages of potable water in most of the globe, except Canada & US. $$ Mar 18, 2012
The NSA Is Building the Country?s Biggest Spy Center (Watch What You Say) http://t.co/iUsN5D0t Time to increase encryption key sizes $$ Mar 18, 2012
@TimABRussell I always read all the books I review; in rare cases when I don’t, I tell readers that I skimmed it. $$ Mar 18, 2012
Central Banking
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?? Been using FRED since it was a bulletin board in 1991. Great job, FRED team! http://t.co/kksvwllMMar 24, 2012
?? The Villain http://t.co/yYReRb4r On Bernanke, the man who expanded the power of the Fed far beyond constitutional limits, if there r any $$ Mar 24, 2012
?? Bernanke Sees Need for Higher Household Spending to Fuel Growth http://t.co/3LQUTGji Yes Ben, we will spend more while we are inverted $$ Mar 24, 2012
?? Fed?s Evans Calls for Stronger Commitment to Low Rates http://t.co/vSKfU36q Read paper; don’t buy it. ARIMA, no out of sample tests $$ Mar 24, 2012
?? That crisis created a very sharp move up in rates http://t.co/jfNAVN3o $$ Mar 24, 2012
?? Bernanke: the man, the legacy and the law http://t.co/zA7OeFc4 ?courts have shied away from developing jurisprudence on monetary policy.? $$ Mar 24, 2012
?? @fatdaz It is my firm belief that no economic entity can dominate entirely; central banks have been destroyed b4; will happen again $$ Mar 24, 2012
?? Masters of the Universe Start to Challenge Ben Bernanke http://t.co/31Pr1yrQ Markets are more powerful than Central Banks, watch out Fed! Mar 23, 2012
?? European Banks Would Have Passed Fed?s Stress Test http://t.co/z5bCBeYy Ultimate insult 4 stringency of Fed’s stress tests $$ #devildetails Mar 20, 2012
?? Bernanke Stands to Gain Capital-Market Experts With Nominees http://t.co/oX8xOdEU We need some people that doubt neoclassical economics $$ Mar 20, 2012
?? Bernanke Returns to Academic Roots to Justify Fed?s Existence http://t.co/ORfma5sE Safe audiences let him talk publicly w/little risk $$ Mar 20, 2012
?? Federal Reserve Stress Tests Make Us All Muppets http://t.co/CQu827KD Ignores E-Zone contagion, increase in int rate volatility, etc $$ Mar 19, 2012
?? Bernanke: “I Want to Bring Back Irrational Exuberance” http://t.co/p0qlQwXe @brucekrasting on overheating in some debt asset classes $$ Mar 19, 2012
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China
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?? Ai Weiwei: ?You?re There but You?re Not Existing? http://t.co/d7mLxHXm RARE interview w/Ai Weiwei, describing his detention in China $$ Mar 24, 2012
?? China?s stock-market supervision suffering http://t.co/QEBPC5ya “Understaffed securities regulator, weak legal system cited” $$ #nosurprise Mar 21, 2012
?? @Roy_Cam They can’t make money b/c of overcapacity; China invested too much in steel & global growth stinks. US exports of steel r rising $$ Mar 20, 2012
?? @Roy_Cam We only import 30% of steel used in US, 4% of which comes from China = 1.2% of steel used is from China http://t.co/FTWt80oa $$ Mar 20, 2012
?? @Roy_Cam You are right there, and that’s one reason why profitability is declining in steel industry globally. $$ Mar 20, 2012
?? China to increase fuel prices 6-7% http://t.co/dBwrepDj Pump prices at record highs; biggest rise since June 2009 #ouch $$ Mar 20, 2012
?? Sad Industry Mantra: Make Steel, Lose Money http://t.co/Pu9e6qFj Insanity; doing same thing, expecting different results. Future bailout $$ Mar 20, 2012
?? The State-Owned Enterprises of China http://t.co/55nvgUMs I think a “big bang” would work, but the Communist Party would never do it $$ #Mao Mar 20, 2012
?? Chinese property *alert* http://t.co/eklWzXkU Property sales value contracted 20% year on year in the two months ending in February. $$ Mar 20, 2012
?? China’s new home prices “no longer rising” http://t.co/UL4T3yzQ The Chinese Gov’t always gets what it wants, until it gets too much of it $$ Mar 19, 2012
?? Chinese Companies Forced to Falsify Data, Government Says http://t.co/tH0MUiYn AN example of why I don’t trust Chinese economic data. $$ Mar 18, 2012
?? @Xiphos_Trading Don’t know if there will be a crash or not, but there has been a lot of malinvestment in China, like Late 80s Japan $$ Mar 18, 2012
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Europe
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?? Those Catchy Spanish (Yield) Curves http://t.co/qoGmGl7E Yields backing up in the Spanish bond market; this could be the next crisis $$ Mar 24, 2012
?? Euro-Zone Banks Get Show of Faith http://t.co/ZWqd8Df5 US MMFs begin adding back yieldy E-zone bank CP $$ #wedontlearnwereallydontlearn Mar 24, 2012
?? On second thought, hold off moving that business to Ireland http://t.co/Bdu6ezon Ireland heading into recession; possibility of default? $$ Mar 23, 2012
?? @Mapsofworld Gun to the head, I think it fails entirely, but that opinion is not held with high probability $$ Mar 22, 2012
?? @Mapsofworld If the E-zone doesn’t move 2a full fiscal union, the Euro will either fail entirely, or become the currency of a smaller group Mar 22, 2012
?? The Safe Haven of the Nordic Currencies Is No More http://t.co/FquH5ZWW It’s a little early to get categorical about this $$ Mar 21, 2012
?? A Wall St. Firm Advises Greece, With Discretion http://t.co/Y12GeNZq $BLK is one powerful firm that many govts in crisis turn 2 4 help $$ Mar 21, 2012
?? Swiss Secrecy Besieged Makes Banks Fret World Money Lure Fading http://t.co/qV197Px1 What good r Swiss banks if no secrecy, tax evasion $$ Mar 20, 2012
?? Germany on a Different Track http://t.co/Gl3BNXBA While Much of EZone Deals W/Busts, Property Prices r Rising in Berlin, Hamburg, Munich Mar 20, 2012
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Rest of the World
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?? Israel Billionaires Put Own Interest Ahead of Holders http://t.co/QSTpBn6E What’s mine is mine; what’s yours is negotiable $$ Mar 24, 2012
?? Late Shah?s Son Selected As Iran?s Person Of The Year http://t.co/phWmAFRQ This is VOA so take it w/a grain of salt; still funny 2thinkabout Mar 24, 2012
?? Latin American Nations in Worse Shape for Crisis, IDB Says http://t.co/zlZvDJi4 “result of lower budget surpluses b4 interest payments” $$ Mar 20, 2012
?? What is the real rate of interest telling us? http://t.co/Vbk13I02 Excess capacity in devel world post bubble pop, send cap 2 emerg mkts Mar 20, 2012
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Insurance
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?? @CflGator Life companies should be simple, but product design exploded to the point where reserving can’t keep up; I own only 1 life co. Mar 24, 2012
?? @CflGator Variable & Universal life products have secondary gtee issues; there r a variety of long dated term products w/rsv issues $$ Mar 24, 2012
?? @CflGator and P&C insurance — life insurance is capital intensive; they are sticking with their simplest biz, aside from long-tail P&C $$ Mar 24, 2012
?? @CflGator It really depends; they wrote a lot of complex life products. On the bright side, a company in runoff is a cash cow. $$ Mar 24, 2012
?? @CflGator That’s the tough Q. $HIG offered significant secondary guarantees when they were the #1 annuity writer. May not b prop reserved $$ Mar 21, 2012
?? Hartford Shares Jump On Split, Analysts Like It Too http://t.co/APFbv4UA Not so fast on $HIG; regulators must approve a split; c my cmmt Mar 21, 2012
?? Should Hartford?s Annuity Holders Be Worried? http://t.co/HfuZO3QO Probably not; small annuitants have protection from guaranty funds $$ Mar 21, 2012
?? Annuity Case Chills Insurance Agents http://t.co/rHkg68Lw I’m always skeptical of products w/high commissions & surrender charges $$ Mar 19, 2012
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Fixed Income
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?? Why Fixed Income Funds May Fall Short http://t.co/cHmF3hOj On the difficulties of combating tracking error in fixed income ETFs. $$ Mar 24, 2012
?? Top Junk Pummels Treasuries for Safest Profits http://t.co/E5vl2qHB That’s the rearview mirror; will be harder to squeeze more returns out Mar 21, 2012
?? The differentiation of Agency MBS risk profiles http://t.co/IJN2mbCm Interesting to see long avg life on high coupon underwater mortgages $$ Mar 21, 2012
?? Bond Bear Market Yet to Roar http://t.co/oNENX9jc The selloff has been piddling so far, has not affected equities, & it may reverse $$ Mar 21, 2012
?? Do High Yield Bonds Know Something Stocks Don?t? http://t.co/986Evuok Equities & Inv Grade corps outperforming HY Corps- call provisions? $$ Mar 19, 2012
?? RE: @thearmotrader Thanks, you did the post that I wanted to do.? Now I just have to point to it. http://t.co/Ru22nvom Mar 19, 2012
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Exchange Traded Products
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?? “@HerbGreenberg mentions that once the creation/redemption mechanism ?breaks? (my word, not his), that the ETF/ETN sh? http://t.co/jxK0bZfX Mar 23, 2012
?? RE: Not likely, but maybe.? If they were forced to see that they were getting a negative (or very low positive) yield? http://t.co/nnxLt2oj Mar 23, 2012
?? Exchange-Traded Notes Are Worse Than You Think http://t.co/FAO4IS3H Path-dependent fees, shadow NAVs, high fees, tracking error, credit risk Mar 21, 2012
?? Who Uses Leveraged and Inverse ETFs Anyway? http://t.co/cYpkVMr5 Retail owns 80%+. Normal ETFs r mostly held by institutions $$ Mar 21, 2012
?? Know Your Client ? Leveraged ETF Version http://t.co/gqPtiZtF Doesn’t matter if leverage is internal or external, client needs come first $$ Mar 21, 2012
?? Money Managers Serving Clients First, Ego Second http://t.co/gY9bd1iR Using the investment vehicles of competing firms — a good thing $$ Mar 21, 2012
?? RE: @finadd “Our results indicate that the extensive purchases of risky private-label mortgage-backed securities by t? http://t.co/cn5TM1cR Mar 20, 2012
?? @amy_calistri at the levels implied by the CEF pricing at some funds, it would shave the yield 3% $DHF $MAV $HIX, 5% $PHT, 12% $PHK $$ Mar 19, 2012
?? @amy_calistri Right. I watch the premiums on credit-sensitive CEFs as a measure of frothiness. If the underlying at some HY CEFs were bot + Mar 19, 2012
?? Anybody know what was up with $EFT today? Floating-rate loan CEF up 4%+, Closed near par last Friday… odd. $$ Mar 19, 2012
?? ‘Junk’ ETFs: Tread Lightly http://t.co/lXftKjwB Check the Price vs the NAV before you buy; also, if w/ds start, index bonds will get hit Mar 19, 2012
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Individual Equities
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?? Leon Black?s Bid Gets No Respect as Great Wolf Surges http://t.co/kqS6pNyU Used 2call this stock “little dog;” badly managed frm beginning Mar 24, 2012
?? @merrillmatter Bezos is scary-smart. I don’t own $AMZN either $$ Mar 21, 2012
?? Just watched it. Wow, very impressive RT @merrillmatter: Skynet shall be renamed SkyBezos — Order Fetch http://t.co/6l9R9bHn $$ Mar 21, 2012
?? +1, ugh RT @abnormalreturns: [post] America officially ran out of good corporate names today. http://t.co/lLGEmeAB $ABT $KFT $AAPL $NKE $MCD Mar 21, 2012
?? You’re on a roll today @merrillmatter: @AlephBlog soon our robot overlords will deliver our bread and circuses to us in the Bezos Colosseum Mar 21, 2012
?? No RT @merrillmatter: @AlephBlog I want to start a consultancy that veto’s stupid company names. Would your anti-consultancy veto that? 🙂 Mar 21, 2012
?? Amazon Wrings Profit From Fulfillment as Spending Soars http://t.co/McHUqMhe Tough work 4 laborers, though. $AMZN pushes pretty hard $$ Mar 21, 2012
?? Kraft to Be Renamed Mondelez After Grocery Unit Is Spun Off http://t.co/GONE6x47 Pronounced ?Mohn-dah-LEEZ.? Sigh, who got paid 4 this? $$ Mar 21, 2012
?? The 400% Man’s New Big Bet http://t.co/33rHut9y Implicitly a bet that $BRKa will always be able to buy back stock @ 1.1x book value $$ Mar 21, 2012
?? In a Major Restructuring, $HPQ To Combine Printer and PC Groups http://t.co/Aj3zaKaY FD: +HPQ; seems like a marginal idea, maybe works $$ Mar 20, 2012
?? Why $HPQ Really Needs A CEO Succession Plan http://t.co/hkPDVkAy Good cultures should promote from within; HP used to have that $$ FD: +HPQ Mar 20, 2012
?? Buffett Message Is ?Do as I Say, Not as I Do? http://t.co/Gcblc8oZ Alice Schroeder very acidic on Buffett; half right & half wrong $$ Mar 20, 2012
?? $AAPL to Pay Dividend, Buy Back Stock to Return Some of Cash http://t.co/uxf6jEBP About time, if there aren’t opps 2use the $$ Mar 19, 2012
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Money Market Funds
?
?? @MarcHochstein Thanks, I found the CFA Institutes comment today, and their view is similar 2 mine in some ways: http://t.co/8yPLcXfX $$ Mar 22, 2012
?? @MarcHochstein investment restrictions moved back to 2008 norms. The ability 2 have credit events frees MMFs to pursue best advantage $$ Mar 21, 2012
?? @MarcHochstein My idea will work 4 MMFs using inv policies prior 2 2008. The MMF folks aren’t earning $$ now, but they could with + Mar 21, 2012
?? @MarcHochstein After reading this: http://t.co/aUoaN4kb Ask them, what if you traded Merkel’s idea 4 a loosening of investment rules? $$ Mar 21, 2012
?? @MarcHochstein 1 more thing; if they have any sympathy toward my idea, I live near DC & would be willing to testify to the SEC $$ Mar 20, 2012
?? @MarcHochstein Does that help? I still think my proposal, one of the few compromise proposals out there would work best of all. Mar 20, 2012
?? @MarcHochstein Having been a life actuary, most regulatory progress happens when actuaries talk w/smarter regulators & forge compromise Mar 20, 2012
?? @MarcHochstein Does that help? MMFs are just saying “We r fine, nothing needs 2b done.” 2me that strategy prob loses. Mar 20, 2012
?? @MarcHochstein Would ask them if they have any way of stopping MMF runs on a private basis; this is the SEC goal; solve that, they leave Mar 20, 2012
?? @MarcHochstein More humbly, I would ask them if they really think they can beat the SEC. SEC’s proposal is horrible, but saying “no” loses Mar 20, 2012
?? @MarcHochstein Not so humbly, I would ask that u show them my proposal that I sent to the SEC, & ask them to back it http://t.co/vuNL8tQE Mar 20, 2012
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Market Dynamics
?
?? The Easy Money’s Been Made, Four Reasons for Caution http://t.co/9kAXqEU4 E-zone calm, risk tolerance+ , VIX low, FOMC may move soon Mar 24, 2012
?? ?and then all of a sudden, THE BULLS WENT BERZERK! http://t.co/bJKCVJha Lots of bullishness out there, though Howard Marks thought otherwise Mar 21, 2012
?? @byrneseyeview That’s true, & I did a presentation on that. One more complicating factor were financials, which looked cheap but weren’t $$ Mar 21, 2012
?? @byrneseyeview Found it. Here: http://t.co/YupRW6yD It’s on a number of topics; it was well-received $$ Mar 21, 2012
?? Contra: The Biggest Bubble You’ve Never Heard Of http://t.co/0tzkPyiA Value can’t b a bubble. Growth can b a bubble. Growth & ROE meanrevert Mar 21, 2012
?? Is this time really different? http://t.co/eePs0aIV It’s never different. It’s always different. Profit margins will mean-revert; Q is when Mar 21, 2012
?? Biggs boosts bullish bets on stocks to 90% net long http://t.co/5fYQDhUC Won’t be the first 2 say this, but makes me doubt the rally $$ Mar 21, 2012
?? The Ax is Back http://t.co/B1j3f7nH @reformedbroker Reduced profits on Wall Street translates into reduced perks, bonuses & jobs $$ Mar 21, 2012
?? Public Companies: The End Is Near http://t.co/KejHwYDu There r still advantages 2being publicly traded, but has eroded since Sarbox, etc $$ Mar 20, 2012
?? S&P 500 Rises to Four-Year High as Apple Plans Dividend http://t.co/RnBf9yEw $AAPL raises the div yld on the S&P 500 by 0.08%. Big! $$ Mar 19, 2012
?? Shares and shibboleths http://t.co/CspyJCNX The equity premium over a diversified portfolio of investment grade bonds is ~1%/yr IMO $$ Mar 19, 2012
?? Hubble, Bubble, Index Trouble http://t.co/2q3CPx4g Been saying this for years, indexing changes market dynamics, what happens @ reversal? $$ Mar 18, 2012
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Politics
?
?? Why Are Your Neighbors Just Like You? http://t.co/0lcPOuLZ On the demise of really knowing your neighbors; we try 2 reach out; few others do Mar 24, 2012
?? @traderscrucible @interfluidity My blog (& Steve’s) have always had a strong public policy emphasis. Dreaming, but we suggest better policy. Mar 23, 2012
?? Agent Based Models http://t.co/0etJ20fL “Why not keep it simple, and just say, you pay an asset tax for every dollar over $100B?” $$ Mar 23, 2012
?? The Warren Buffett Chain Letter http://t.co/31FFSrmm Draconian adjustments. What Buffett did & didn’t say. 3% deficit ejects Congress $$ Mar 21, 2012
?? Migration of sovereign debt from private hands to public institutions http://t.co/rQbDTXg3 &the debt sits til liquidity is needed -> crisis! Mar 21, 2012
?? To Stay On Top, The US Must Invest In Research Universities http://t.co/P4kyUqY0 FD: + $INTC; do it w/yr own $$ not taxes; c my comment Mar 20, 2012
?? RT @BarbarianCap: “cnbc: California Cities Scrambling to Avoid Becoming Insolvent” > the die was cast years ago; clowns, path depende … Mar 20, 2012
?? Stopping the National Debt: A Movement Led By a Cowboy, a Colonel, & a Citizens’ Cavalry http://t.co/frqAXCpy Natl Debt Relief Amendment Mar 20, 2012
?? Who is REALLY paying in the $25bil TBTF mortgage settlement http://t.co/T2h1B5CO $5B from banks, rest MBS holders eg pension plans, insurers Mar 19, 2012
?? The JOBS Act: Plutocracy in Action http://t.co/Fjo3Ppet Another article on the previous topic; don’t downgrade information quality $$ Mar 19, 2012
?? Small Biz Jobs Act Is a Bipartisan Bridge Too Far http://t.co/AwBXg184 Would not mess w/securities laws in that way to create growth $$ Mar 19, 2012
?? Public Unions Send Medical Bills to Taxpayers http://t.co/Lb2XgAv9 CA Sup Ct foolishly makes healthcare nonreducible. CA will die $$ Mar 18, 2012
?? As Unions Lose Their Grip, Indiana Lures Manufacturing Jobs http://t.co/vj177CT2 Like my article that few like http://t.co/WgdN7Mmq $$ Mar 18, 2012
?? Pension Legislation Could Cut Contributions, Hike Taxes http://t.co/Tj1UlUz8 Stupid proposals that weaken DB pensions, companies r strongnow Mar 18, 2012
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Regulation
?
?? Where is the Center for Audit Quality When We Actually Could Use It? http://t.co/jWt09bcw JOBS Act: destroy info reliability to create jobs Mar 23, 2012
?? Fed?s Fisher Says ?Too-Big-to-Fail? Problem Remains http://t.co/eLvHGmXt Richard Fisher favors breakup of the biggest banks. $$ Mar 21, 2012
?? @carney just read your piece on the net capital rule. Similar to my piece last November http://t.co/tl28NPku Good piece. $$ Mar 21, 2012
?? Top Court’s Patent Rejection Alarms the Biotech Industry http://t.co/oK11WlvR ’bout time we forced a more fundamental review of patents Mar 21, 2012
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Economics
?
?? Solar?s 80% Plunge Hurts Utilities From Hawaii to Spain http://t.co/m9eACVTp Overcapacity drives down prices of PV panels for now. $$ Mar 21, 2012
?? Mean Time Between Failures http://t.co/zkT0z9cX The “recovery” is getting long in the tooth, eg it may end soon; graph: http://t.co/xOHA1IYA Mar 20, 2012
?? Obama?s tax hikes threaten a new US recession http://t.co/uNHwBpeJ Looking @ 4 more years of divided govt & stalemate $$ #debtbombgrows Mar 20, 2012
?? @The_Dumb_Money I would have liked to see the Banks/Etc. who owned the servicers bear more of the cost $$\ Mar 20, 2012
?? Partial equilibrium intuitions about choice http://t.co/215kIrmS @interfluidity more difficult to solve general equilibrium Qs than partial Mar 19, 2012
?? Understanding the New Price of Oil http://t.co/TaMTaneR No surprise here; most cheap oil has been found, the price of oil should rise $$ Mar 18, 2012
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Miscellaneous
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?? @merrillmatter Factoid: 100,000,000,000 to 1 for a monkey to type the word “banana” from random typewriter jumping Mar 21, 2012
?? Is a Calorie a Calorie? http://t.co/4hyTfSvr Yes, but different nutrients come w/calories. Also, a unit of fat has 2x cals vs carbs/protein Mar 21, 2012
?? Madoff’s Lament: I Was An Honest Money Manager Once http://t.co/OGp2xRHR The outside world should ignore Madoff now. Attention feeds him. Mar 21, 2012
?? On Slime and Water http://t.co/8iezy0FK Pink Slime in burgers, and shortages of potable water in most of the globe, except Canada & US. $$ Mar 18, 2012
?? The NSA Is Building the Country?s Biggest Spy Center (Watch What You Say) http://t.co/iUsN5D0t Time to increase encryption key sizes $$ Mar 18, 2012
?? @TimABRussell I always read all the books I review; in rare cases when I don’t, I tell readers that I skimmed it. $$ Mar 18, 2012
First, I have some blog news:? my hosting provider made me delete 7000 spammers out of my user database.? That left me with 200+ users.? Inadvertently, in the process, around 70 bona fide users with surnames starting with the letters J-Z got deleted.? So, if you got deleted, and have to re-register, my apologies.? I tried to be careful, but made an error when matching databases.
Second, MetLife should not have to undergo the stress tests that banks do.? Banks borrow short and lend long; they are inherently unstable.? Insurance companies generally match assets and liabilities, and are stable.? The only insurer of consequence to fail in the crisis was AIG, and it was because of derivatives and securities lending issues, areas that other insurance companies do not touch, or handle differently.
Third, why does an institutional investor use an investment bank?
When I was a corporate bond manager, we used everyone.? We wanted access to deals, and if you don’t deal with all of the majors, you are shut out.? Of course every manager deals with Goldman Sachs even if they don’t trust them.? The big guys know this and keep their brokers at arm’s length.
If you are a reporter, that is why managers will not speak on record.? If the syndicate desks on Wall Street don’t like you, they won’t give you good allocations on contested deals.
Bond managers are wise to use Goldman.? They are wiser to realize that Goldman does not act in their interests, and so, be cautious.? And to the degree that you are a smart manager, you can lessen your dependence on the big guys, and work with the hungry second tier, who know that money can be made by implementing the ideas of smart investors, so find ways to buy cheap bonds for smart investors from dumb investors, and sell rich bonds from smart investors to dumb investors.? After all, brokers only make money when assets are bought or sold.
There are few friends on Wall Street.? Big institutions know that, retail investors should learn that.? But the guy who resigned from Goldman should be aware that not all clients were muppets.? Firms I was with would avoid derivatives unless we were the ones structuring them.? If we have control, derivatives are good.? If we don’t have control, derivatives are bad.? Control is good….
You should always be thinking that those who you deal with may not be acting in your interest, and often, it is because of forces beyond their control.? I was pinned with $10MM face of Teleglobe bonds and the main broker dealing in them held (unknown to me at the time) $100MM+ of the bonds.? My efforts to sell the bonds failed because the broker had a larger position, and there was no active market.
Fourth, just because you live in America, it doesn’t mean you should get a high wage.? Particularly for manufacturing wages are declining, and why shouldn’t they decline, because productivity is not rapidly advancing.? It’s like my article on comparable worth.? Most Americans are going to have to get used to being poorer, because there are many others who can do what they do for less.? And, that partly explains the 1% vs 99% argument, because as the rest of the world grows, and the US doesn’t, it has impact on those in the US that earn too much relative to their productivity.
Fifth, imagine for a moment that you are in charge of an organization that is going to play a baseball game against the winners of the World Series.? You can choose any people to be players that have not been employed in MLB for the last five years.? How well do you think you will do?
Duh. You know you are going to lose.? Well, the same thing applies for those that are arguing that the 99% can dominate the 1%.? Short of Soviet tyranny, it won’t work.? The 1%, should it really exist as a stable organization, is too smart, and will beat the 99% nine times out of ten.
We talk a lot about democracy, though our government thwarts it when it can.? Government typically boils down to aristocracy — the rich rule, and it can’t be otherwise, unless we want Communism, like China under Mao.? In the Eurozone, under the “socialism,” the wealthy happily rule.? Only societies that are wiling to destroy wealth are willing to deny power to the wealthy.? And China is a great example here, as the wealthy increasingly dominate their government, to a greater degree than is true in the US.
Money talks, losers walk, and I never give money to politicians; it is all too corrupt.? Just realize that the deck is stacked against you.? Money finds a way to win in the process eventually.
Sixth, California will suffer for making retiree healthcare unchangeable.? Retiree healthcare in its present form is not affordable by almost everyone.? Why destroy your state by making? promises that can’t be upheld?
Seventh, after you read this, explain why you might trust Chinese statistics.? I reminds me of AIG where bad news had a hard time traveling to the top.
Norway Faces Housing Bubble as Krone Steals Policy Agenda http://t.co/15hzb0So By cheapening the currency Norway gets an asset bubble $$ Mar 17, 2012
Unintended Consequences http://t.co/eLrKtCJc Sprott suggests that the financial system has a chemical dependency on the Central Banks. $$ Mar 17, 2012
Is the bond market tightening for the Fed? http://t.co/iRSerA8X The bond market is larger than the Fed; they can’t control the curve $$ Mar 17, 2012
Germany Turns Up Pressure on ECB http://t.co/w2yyfvU1 Difficult to see how the liquidity drains out of the ECB ~3 years from now $$ Mar 13, 2012
China central bank news conference on policy, yuan http://t.co/w8cy5K1Z & http://t.co/XcIFAbvb Japan buys Yuan, don’t think it means much Mar 13, 2012
Bond market certainly did not like the FOMC statement. “Don’t worry about energy prices, we got it all under control.” $$ #fuelinginfltion Mar 13, 2012
Investment Banking
Why banks will continue to rip off clients http://t.co/oTT9fd2i Conflicts on Wall Street, especially at $GS. Big guys know that. So what? Mar 17, 2012
Goldman Sachs?s long history of duping its clients http://t.co/2sXmKl0D Tells the story of how $GS foxed its way out of Penn Central CP $$ Mar 17, 2012
The CMBS maturity wall is here http://t.co/GrcEm1KO I remember buying CMBS deals 11-12 years ago. Bullet loans weak if can’t refinance $$ Mar 17, 2012
Goldman Roiled by Op-Ed Loses $2.2B for Shareholders http://t.co/yz0f0oLy A passing matter; of course IBs have conflicts of interest #duh Mar 17, 2012
China
Bo?s Ides of March http://t.co/mnKFU8Zx Not so much a move to the right as a statement against being flashy and self-promoting $$ Mar 17, 2012
Chinese Economy Already in ?Hard Landing,? JPMorgan?s Mowat Says http://t.co/kwFW2Ty6 Cyclical industries will produce less in China 2012. Mar 17, 2012
China’s official admission of slowing commerce activities http://t.co/br7H4D2o When a long trend changes, often moves further than expected Mar 17, 2012
China’s fixed asset investment growth moderating http://t.co/CEl5mZTc “Growth in real estate and manufacturing projects remains steady.” $$ Mar 13, 2012
GMO: Something’s Fishy in China http://t.co/DO8v4w8p Goes through the 10 signs of a bubble; finds that Chinese economy has most of them $$ Mar 13, 2012
US and Europe Move on China Minerals http://t.co/xyGsdkDq WTO ruled against China in January, pressing similar case 17 rare-earth metals Mar 13, 2012
Another call for an end to China driven industrial commodities “super-cycle” http://t.co/VAd5gR0D Investment is way too high & unproductive Mar 13, 2012
Rest of the World
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Sarkozy?s Yield Drop at Risk With Hollande Victory http://t.co/ti25ozdq Surprise, if Hollande cares for poor in France, E-Zone suffers $$ Mar 17, 2012
Saudi Arabia Lifts Curtain on Diplomacy as Syria Killings Spur King to Act http://t.co/H8g8D5nG Favors 85% Sunnis over ruling 15% Alawites Mar 13, 2012
How about those Japanese net-net’s? http://t.co/SAZEcofy Making money in very ill-known small companies in Japan $$ Mar 13, 2012
Portugal Yield at 13% Says Greek Deal Not Unique http://t.co/bPBconfk After Greece, the next places to watch are Portugal & Spain. $$ Mar 13, 2012
Iran-Israel History Suggests a Different Future http://t.co/M1IzxuuB I never knew that Israel sold weapons to Iran in the ’80s. $$ Mar 13, 2012
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Financial Sector
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MetLife CEO’s Stress Test http://t.co/YaVV4GMp $MET doesn’t deserve to be treated as a systemically risky firm. Long liabilities protect Mar 17, 2012
Assurant Falls as California Seeks Rate Cuts http://t.co/d0OcDS09 FD: long $AIZ; this is overrated; ability of the commissioner limited $$ Mar 17, 2012
Felix Salmon At Columbia Journalism School: Don’t Blame Journalists For Failing To Prevent Financial Crisis http://t.co/0LrCwisB true, but Mar 13, 2012
Journalists, even if they understood what was going on in the finl mkts would face a tough time writing warnings in the midst of boom $$ Mar 13, 2012
US Government Agencies Comparing Notes On Algo Feeds http://t.co/15oAxpn9 Little speed advantages w/econ data can lead to big profits #SEC Mar 13, 2012
Marketview:Point of Reference http://t.co/Xlp5jczH “4 the 1st time this yr I can feel the true bullish sentiment among the investing public” Mar 13, 2012
Banks foreclosing on churches in record numbers http://t.co/fR3Ro9CJ Frankly, I am surprised that banks lend to some churches. $$ Mar 13, 2012
Banks Buy Treasuries at Seven Times Pace in 2011 http://t.co/SDKsJIUB What else to do with all the excess liquidity & weak borrowing $$ Mar 13, 2012
US Government-Related
Pension Benefit Costs Cut by Record 43 States, Study Says http://t.co/B8ZRg4gZ State take actions to reduce benefits to active employees Mar 17, 2012
Best Treasury Forecaster Says 10-Year Yield to Drop From Highs http://t.co/ma8YoN4u Don’t be too sure about Treasury rates rising $$ Mar 17, 2012
International Demand for U.S. Assets Rises http://t.co/FwdXqrWH As the E-Zone gets worse, demand for US debt improves. $$ Mar 17, 2012
Investing
Temporary Hedges eventually force Deleveraging http://t.co/0jVSWRzw On Energy Future Holdings, & why predicting the future is tough $$ Mar 17, 2012
Cyclicals persistent underperformance http://t.co/KkJ2q05p Cyclicals started underperforming in August. Relatively they never recovered. $$ Mar 17, 2012
Magnetic Fields http://t.co/S6VYIe5Y Good post. This graph is worth a look: http://t.co/EBhPh6ZN May help explain recent lost decade $$ Mar 13, 2012
Stock Compensation, Tax Law, Financial Reporting and Facebook’s IPO http://t.co/ULyVLNkr Future dilution may pressure $FB shares $$ Mar 13, 2012
A Value Investor’s Take on Shorting http://t.co/cZYueqGH Tactical discipline, not structural, b/c market can go nuts. Can help hedge $$ Mar 13, 2012
Miscellaneous
Considering Bankruptcy? Head to the Mall http://t.co/UvgEArMj Legal services offered for simple situations in mall locations. $$ Mar 13, 2012
This is two books in one, and very well done.? The main part of the book explains risk and uncertainty in general terms, such that most people can understand it.? But for those that can deal with complex math, the latter part of the book offers a lot of additional firepower.
Risk is a tough subject because history only vaguely informs you as to how bad things can get.? Past is not prologue.? There are two possibilities, the past contains and event that was so horrible that it can never happen again, or, the past does not tell you how bad things can be.
Market observers took the first view, that the Great Depression could not repeat.? As a result, few prepared for a situation where there was too much debt, and insufficient ability to service it.
The subtitle of the book is rightly “Uncertainty at the Core of Finance.” Not risk, but uncertainty.? The distinct is important, because risks are things that we know some things about the possible economic outcomes, and can control them to a degree.? Uncertainty is where we don’t really understand the dimensions of the outcomes, and have little if any control.
There is fundamental uncertainty to the simplest aspect of finance, money.? Money seems stable enough in the short-run, but every now and then it fails due to hyperinflation, or the slow steady failure in the store of value sense of moderate inflation over long periods.
Wealth itself is uncertain.? Even if you own it free and clear, there’s no way to tell what it will be exchangeable for next year, much less further out.? There are a lot of people who thought they knew what their homes were worth 5-7 years ago that are decidedly disappointed.
Government debt is uncertain, as governments think they can always roll it over, but political and other obstacles can lead to a refusal to pay when debt service becomes high relative to tax revenues.
Banking is uncertain, mainly because of borrowing short to lend long.? If banks limited themselves to facilitating transactions, a lot of the uncertainty would go away.? Banks would be a lot smaller, less profitable, and there would be fewer of them, and the economy would be more stable.? (Entities with longer liability structures, like pension plans, endowments, and life insurers would become the new source of lending. More would be financed through equity.)
Credit is uncertain.? During boom times, corporate bonds behave independently, and diversification evens out results.? As a result, corporate credit seems safer than it really is, and marginal ideas get to borrow.? During bust times, far more corporate debt defaults than would be expected — there’s almost no such thing as an average year.? It’s either feast or famine.
There are things that can be done to try to mitigate uncertainty: credit ratings, or any scoring system for assets, lending at a more senior level, and Value-at-Risk.? Also using more robust assumptions on possible outcomes, which would lead to smaller position sizes, less leverage, or more cash.
The book has a real strength in showing how the the assumption of normally-distributed risks fails dramatically in many cases, and offers alternatives that would work better.? Trouble is, once you realize how volatile the world really is, a lot of strategies either don’t work, or need to be scaled back.
The book praises actuaries as risk managers, with their ethic codes and stress tests, as opposed to quants with Value-at-Risk and no ethics code.? Banks and Wall Street would be better off in the long run hiring actuaries, who think about risk more holistically, and getting rid of the quants in their risk control departments.? Same for the regulators who evaluate banks.
There are other controversial ideas here: is it possible that the strong economic growth of the past is an anomaly?? Is it possible that growth for nations, and the world as a whole follows S-curves, like products and companies?
This is an ambitious book, and I like it a lot because it is willing to cross boundaries and apply the principles in one? area to another that seemingly should not receive it.? I liked it a lot, and would recommend it to many.
Quibbles
On page 17, he thinks of currency as a put option, but I think of it as 0% overnight commercial paper.? On page 37, he confuses Moses and Joseph, having Moses predict the 7 good followed by 7 bad years, when it was Joseph who did that.
Who would benefit from this book: Every financial regulator should have this book.? Every academic burdened by the lies of Modern Portfolio Theory should get this book.? Anyone who fancies himself to be a risk manager should have this book.? Finally, if you want to understand why financial markets are inherently uncertain, this book will teach you well.? If you want to, you can buy it here: Pandora’s Risk: Uncertainty at the Core of Finance (Columbia Business School Publishing).
Full disclosure: The publisher asked if I wanted the book.? I said ?yes? and he sent it to me.
If you enter Amazon through my site, and you buy anything, I get a small commission.? This is my main source of blog revenue.? I prefer this to a ?tip jar? because I want you to get something you want, rather than merely giving me a tip.? Book reviews take time, particularly with the reading, which most book reviewers don?t do in full, and I typically do. (When I don?t, I mention that I scanned the book.? Also, I never use the data that the PR flacks send out.)
Most people buying at Amazon do not enter via a referring website.? Thus Amazon builds an extra 1-3% into the prices to all buyers to compensate for the commissions given to the minority that come through referring sites.? Whether you buy at Amazon directly or enter via my site, your prices don?t change.
Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth.
Information received since the Federal Open Market Committee met in January suggests that the economy has been expanding moderately.
No real change, deletes comment about slowing global growth, which is still slowing.
While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated.
Labor market conditions have improved further; the unemployment rate has declined notably in recent months but remains elevated.
The unemployment rate is down, but few jobs are being created, and people are dropping out of the labor force.? The improvement isn?t that large.
Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed.
Household spending and business fixed investment have continued to advance. The housing sector remains depressed.
Shades up their view on business investment.
Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable.
Inflation has been subdued in recent months, although prices of crude oil and gasoline have increased lately. Longer-term inflation expectations have remained stable.
True for the last few months for goods & services prices, but past isn?t prologue.? TIPS are showing higher inflation expectations.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.
No change.? Mentions of the statutory mandate are always meant to hide the distasteful aspects of what they do.
The Committee expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate.
The Committee expects moderate economic growth over coming quarters and consequently anticipates that the unemployment rate will decline gradually toward levels that the Committee judges to be consistent with its dual mandate.
No change.
Strains in global financial markets continue to pose significant downside risks to the economic outlook.
Strains in global financial markets have eased, though they continue to pose significant downside risks to the economic outlook.
No real change.? The strains in Spain fall mainly on the plain banks.
The Committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the Committee’s dual mandate.
The recent increase in oil and gasoline prices will push up inflation temporarily, but the Committee anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate.
Adds language noting the rise in energy prices, but don?t worry, because monetary policy will fix that.
To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy.
To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy.
No change.
In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
No change.
The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.
The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.
No change.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen.
No change for the Apostles of Central Bank unorthodox asset management policies.
Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate.
Voting against the action was Jeffrey M. Lacker, who does not anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014.
No real change.? Nice for there to be some dissent.
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Comments
No significant changes from last time.? They do note that energy prices are rising, but they don?t see that affecting inflation.
In my opinion, I don?t think holding down longer-term rates on the highest-quality debt will have any impact on lower quality debts, which is where most of the economy finances itself.
Also, the reinvestment in Agency MBS should have limited impact because so many owners are inverted, or ineligible for financing backed by the GSEs, and implicitly the government, even with the recently announced refinancing changes.
The key variables on Fed Policy are capacity utilization, unemployment, inflation trends, and inflation expectations.? As a result, the FOMC ain?t moving rates up, absent increases in employment, or a US Dollar crisis.? Labor employment is the key metric.
The Fed is out of good policy tools, so it will use bad policy tools instead, and for longer than before.
Do they want the yield on 30 year TIPS to go negative?? Looks that way.
GDP growth is not improving much if at all, and the unemployment rate improvement comes more from discouraged workers.? Inflation has moderated, but whether it will stay that way is another question.
Questions for Dr. Bernanke:
Is it possible that you don?t really know what would have worked to solve the Great Depression, and you are just committing an entirely new error that will result in a larger problem for us later?
Why do think extending the period of accommodation by a little more than a year will have any significant effect on the economy, aside from stock and bond prices?
Discouraged workers are a large factor in the falling unemployment rate. Why do you think the economy is doing well?
Couldn?t increased unemployment be structural, after all, there is a lot more competition from labor in emerging markets?
Why do you think that holding down longer-term rates on the highest-quality debt will have any impact on lower quality debts, which is where most of the economy finances itself?
Why will reinvestment in Agency MBS help the economy significantly?? Doesn?t that only help solvent borrowers on the low end of housing, who don?t really need the help?
Isn?t stagflation a possibility here?? I mean, no one expected it in the ?70s either.
Could we end up with another debt bubble from keeping short rates so low?
If the Fed ever does shrink its balance sheet, what effect will it have on the banks?
This period of the Aleph Blog covers May through July of 2010.? The one big series that I started in that era was “The Education of a Corporate Bond Manager” series.? The idea was to describe how a neophyte was thrust into an unusual position and thrived, after some difficulties.
Reaching for yield always has risks, but the penalties are most intense at the top of the cycle, when credit spreads are tight, and the Fed?s loosening cycle is nearing its end.? It is at that point that a good bond manager tosses as much risk as he can overboard without bringing yield so low that his client screams.
Much research fails quietly, but other researchers don’t learn about the dead ends.? Better that they should learn of the failures, and avoid the dead ends.
Going over Kartik Athreya?s letter criticizing nonprofessional economics bloggers.? Why the math behind macroeconomics and microeconomics doesn’t work.
When you are a part of a small broker-dealer, all manner of harebrained deals get offered to you.? This explores three of them.? Note: management did not ask my opinion on the fourth deal, and that is a large part of why they no longer exist.
One more note: the guy who was going to pledge $5 million of stock in example 2 for a $1 million loan?? The stock is worth $7,000 today.
The economics of the states tells us a lot more about the national health because they can’t print money to buy national debts.? (Though they can can raid accrual accounts…)
My view is that neoclassical economists are wrong.? Aggregate demand has failed for four reasons:
Overleveraged consumers will not readily buy.
Citizens of overleveraged governments will not readily spend, for fear of what may come later from the taxman, or from fear of future unemployment.
Aggregate demand is mean-reverting.? It overshot because of the buildup of debt, and is now in the process of returning to more sustainable levels.? The same is true of private debt levels, which are being reduced to levels that will allow consumers to buy more freely once again.
When the financial system is in trouble, people get skittish.
Complex and expensive hedging solutions, many of which embed some credit risk, can be less effective than lowering leverage, and (horrors) holding some cash.
This one had its detractors, because I believe the paradox of thrift is wrong.? Too much aggregation, and it does not allow the dynamism of the economy to adjust over time, even from severe conditions.
How the Government Lies About the Real Inflation Rate http://t.co/g6E4KxV5 I agree inf is understated, but by 1-2%, not 6-8%/yr $$ Mar 09, 2012
Tax Hunt Pushes Global Wealthy Into Offshore Trusts for Children in US http://t.co/l53hjFH1 Many clever ways 2cheat the taxman #thinkahead Mar 07, 2012
How Much Do Income Taxes Affect Our Behavior? http://t.co/mADKt7a7 Answer: not much, but people favor lower marginal tax rates anyway $$ Mar 07, 2012
On Politics, Social Security and Spine http://t.co/N8O1Eu6h @brucekrasting on the Disability Income Trust & what it implies 4 politics $$ Mar 07, 2012
Why Young People Might (Eventually) Like to Buy a House http://t.co/yC9FX7H5 On the low end, this makes sense at present. $$ Mar 06, 2012
Getting Ready to Buy a House http://t.co/6aqzzPmI Megan McArdle notes how low down payments r still prevalent; system not clean @ present $$ Mar 06, 2012
Warren Buffett vs. the profiteers of doom http://t.co/02XgQ9tB Unless the US fails in entire, Buffett will be right & the scaremongers wrong Mar 06, 2012
NACM credit managers’ index trade credit increase http://t.co/LUdFkYTZ Businesses r more confident in extending credit; coincident indicator Mar 04, 2012
@DavidSchawel Then they are having materially better performance than the FHA; I still think housing prices have further to fall on hi end Mar 04, 2012
Your Share of Fannie, Freddie Losses: $1,300 http://t.co/h9KdR5d3 Even considering what they are paying the US in dividends, they lose. $$ Mar 03, 2012
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Federal Reserve
@GonzaloLiraSPG Borrow, not print. Fed becomes huge hedge fund 2 arb risky debt spreads. Not in favor of this, but it is happening in small Mar 09, 2012
Thought experiment: What would happen if the Fed borrowed enough money to buy up all of the MBS, CMBS, ABS, Agys, Corps, Munis, etc? $$ Mar 09, 2012
What the Fed is Considering Doing in Layman’s Terms http://t.co/dXZTMXL2 Levering up, taking more risk in an effort to reduce long yields $$ Mar 09, 2012
Bernanke Seen Accepting Faster Inflation as Fed Seeks to Boost Employment http://t.co/AyixImcf Fed is asymmetric, only fights unemployment Mar 08, 2012
http://t.co/DR8SLua2 NY Fed never buys the on-the-run and near the run nominal bonds, does the opposite for TIPS, pushes up implied CPI $$ Mar 07, 2012
Fed?s Money Monopoly Endangers Liberty and Peace http://t.co/TGhcvm8O Unsound money encourage governments 2b graspy & warlike $$ Mar 07, 2012
Central bank policy driving corporate spreads http://t.co/YvV1djQb When the Fed offers cheap financing, risk asset flourish $$ Mar 06, 2012
Woodlands congressman battling Federal Reserve’s power http://t.co/iUiwTimH Inflation only, expand role of Regional Feds; Fisher likes it $$ Mar 04, 2012
The eventual unwinding of QE: why it?s ignored and what it could mean http://t.co/BPRMaGaU The Fed will be reluctant 2 shrink the Bal Sht $$ Mar 03, 2012
Eurozone
Draghi Lays Groundwork for ECB Stimulus Exit as Inflation Takes Spotlight http://t.co/0y5znzjH So u can’t get inflation thru debt growth? Mar 09, 2012
Bond And CDS Arbitrage Opportunities? http://t.co/uRDRh59G Sov CDS “cheap” 2 bonds b/c of a lack of trust in the default trigger $$ Mar 09, 2012
Draghi Headache: Inflation Heating Up in Europe http://t.co/RQqvvOiC Draghi raised the 2012 forecasts for inflation to 2.1%-2.7% $$ Mar 08, 2012
Rift Grows Between Germany’s Bundesbank and ECB http://t.co/trwAlyWm Wise Buba will take pain where ECB wil not. Follow this it will destroy Mar 08, 2012
Goldman?s Secret Greece Loan Reveals Sinners http://t.co/eMzOvs2X When u conspire 2b shady, u work w/the shady, who will cheat u2 $GS $$ Mar 07, 2012
French-German Border Shapes More Than Territoryhttp://nyti.ms/zDuqpi Culture matters. Policy matters. Similar people yield different results Mar 06, 2012
Everyone Loves Mario http://t.co/2sDYYNXh Draghi is popular at present, but this will not end well, b/c bank dependence on the ECB will tell Mar 04, 2012
The optimistic view of Europe http://t.co/xtsVrfrY Rogoff argues that these are the birth pangs of the USE: the United States of Europe $$ Mar 04, 2012
IMF Set to Curb Funds for Greece http://t.co/XvNhtAcm IMF has 2 much exposure to EZ-fringe; could it b global system hit peak debt? $$ Mar 04, 2012
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Economics
An interesting model of asset bubbles http://t.co/cHcFGHht Follows the debt-fueled model of asset bubbles, with momentum tossed in $$ Mar 09, 2012
Model Thinking Notes I from Stanford Class http://t.co/qHD0UCzt Those applying models to political questions predict better than others $$ Mar 09, 2012
Investors Crave a Taste of the Island http://t.co/fjWsoVDR Amazing how reducing deficits and cleaning up finances can bring growth $$ Mar 09, 2012
Cicero quote of the week http://t.co/Y1e6KKYL The budget should b balanced, the Treasury should b refilled, public debt should b reduced… Mar 08, 2012
Kindleberger?s Universal Bubble and Crash Scenario http://t.co/Og2VYsX8 We are overindebted, should we be surprised that we face a crisis? Mar 08, 2012
After 3 years, we?re all hooked on free money http://t.co/oKRDzSPD Low base rates are creating a new kind of inflation, sad but true $$ Mar 08, 2012
China
Contra: China Inflation May Provide Room for Stimulus http://t.co/Qds1uBwx That is, if you can believe the Chinese inflation statistics $$ Mar 09, 2012
Asian banks may b bust; tiger still bites http://t.co/2mW40PMJ Economic consultancy Lombard Street warned China is financial house of cards Mar 08, 2012
According to Credit Suisse, the global commodity demand has peaked http://t.co/GNXsHZwL China cannot increase its demand further $$ Mar 08, 2012
China Life Discount Swells on World Growth Woes http://t.co/Jl27DtCk I still don’t get China Life and its business model; avoid b careful Mar 08, 2012
China needs to enhance ability to win ‘local wars’, Premier says http://t.co/THUVeHVe Dominance of the South China Sea is desired $$ Mar 07, 2012
China?s State of the Union http://t.co/D2E2yaH0 China has fewer options by the day. GDP is shrinking because much production is worthless $$ Mar 04, 2012
+1 $$ RT @The_Analyst: @AlephBlog ha, newsflash: people whose livlihood depends on strong real estate market say market is strong… Mar 04, 2012
End of The World not nigh, say developers http://t.co/JTDwPtT3 A lot of cross-currents in Chinese property markets, suspect trouble $$ Mar 04, 2012
China?s Politics in Rare Bloom http://t.co/kmDFW8ou A rare season where the hidden politics of China become publicly visible $$ Mar 04, 2012
Miscellaneous
‘Internet-in-a-Suitcase’: The Web Technology That Wants You to Be Free http://t.co/UXTNOHDo Not live yet, but coming 2a revolution near u Mar 09, 2012
Wal-Mart Therapy Tried as Pentagon Copes With Traumatized Troops http://t.co/7YIU2yqJ long $WMT | PTSD? Trips 2 WMT may help, really. $$ Mar 08, 2012
US public schools sell empty classroom seats abroad http://t.co/qTuefNqV Solves a tough problem 4 rural districts w/falling enrollment $$ Mar 08, 2012
US Top Destination for Christian, Buddhist Immigrants, Study Says http://t.co/gZW6T62o Interesting commentary on religion & migration $$ Mar 08, 2012
The Confucius quote is a lot like Hillel’s “Do not do unto others what you would not hav… http://t.co/XplJNuew Mar 07, 2012
RE: @dcrothers This is too important to be left to preschools only. Mothers and fathers must take an active role in t? http://t.co/4je2nZj2 Mar 06, 2012
Markets
Insurers to re-examine risk, capital structure in 2012 – PwC http://t.co/1Cl8bTc1 Low ins co valuations begets low interest for M&A $$ Mar 09, 2012
Contra: Apollo Wants to ?Be the New Bank? in 2012, Co-Founder Rowan Says http://t.co/HjfMo5xx Might work in short-run; dangerous idea $$ Mar 09, 2012
Tactical asset allocation — Another ripoff http://t.co/NVCwvCCQ During bear markets, TAA gains temporary cache as market timing $$ Mar 08, 2012
Think Twice, Even Thrice, Before Trading http://t.co/618YZMAB Most of the time, trading leads to losses, people like the illusion of control Mar 08, 2012
Trade to improve your portfolio http://t.co/fINnnvh1 Features thoughts of those who agree. When will average people listen to the good guys? Mar 08, 2012
The mystery of the vanishing stock trader http://t.co/y0jvQ6F8 Volume is disappearing in Canada. That’s probably healthy; buy Canada $$ Mar 07, 2012
@CflGator My simple solution to all of that is that only hedgers may initiate trades, speculators may not trade with speculators. $$ Mar 07, 2012
Contra: Managed money goes LONG oil http://t.co/SartTMgC In mid-2008, there weren’t as many speculative longs & the price was far higher $$ Mar 07, 2012
Companies Float Up to $20 Billion in Bonds http://t.co/CJTnGiTE If that much is getting digested easily, maybe the corp rally continues Mar 07, 2012
@lcsonka39 @hedgefundinvest I did use the words “if” and “maybe.” I am far enough away that I’m not sure, but I have been through that b4 $$ Mar 07, 2012
US Insurers Face $2 Billion in Claims From Tornadoes, Risk Modeler Says http://t.co/N6vW1uIn I would expect a rough weather year $$ Mar 07, 2012
IBM?s Watson Computer Gets Wall Street Job http://t.co/qP2mlQDZ Bloodless. Soulless. Brilliant. Ultimate Risk Manager or Disaster Creator Mar 07, 2012
Judge: Jefferson County Chapter 9 Case Can Continue http://t.co/MGn2sDTD Remember Ch 9 only gives breathing room, Empee benes relief $$ Mar 06, 2012
Do You Need to Buy Big Oil Stocks? http://t.co/FlPMNBXN Arends: As fuel prices soar (again), it may make sense to invest where you spend Mar 06, 2012
How To Make Financial Content http://t.co/NRLLm00B Funny takes from @reformedbroker on how various news organizations write their copy $$ Mar 06, 2012
Demographic trends will depress portfolio returns, this researcher warns http://t.co/yDXh8J8C Arnott makes u look at the real economy $$ Mar 06, 2012
Stocks Cheaper Than Any U.S. Peak in 23 Years http://t.co/wZAnn7Ij Key Q: what will profit margins do? Only will 2 use capital is scarce Mar 06, 2012
Milwaukee?s Home-Grown Managers Shun Fads http://t.co/oSzOOjMh My hometown. People there are rational and not given to fads. $$ Mar 06, 2012
Dan Zwirn, the Man Who Fell to Earth http://t.co/NmgWpqRm Grew hedge fund fast, inadequate operational support, scandal, business dies $$ Mar 04, 2012
International (rest of the world)
One Year Later, Japan City Sees Light?in a Long Tunnel http://t.co/3JfbCqWG Too much $$ being tossed at too few people in short-run Mar 09, 2012
Australian vs Canadian property http://t.co/7Q3pdBP1 Argues that Canada is in trouble, Australia in worse shape but a better economy for now Mar 07, 2012
Faros Trading: Yen to Weaken http://t.co/cSAp3Fra & http://t.co/aJkOCcXQ Idea that the yen may weaken is gaining traction $$ Mar 06, 2012
Canadian envoy to Iceland sparks loonie controversy http://t.co/QZfE9Kvi Hey, I would link to the loonie if I could, smart idea $$ Mar 06, 2012
BRIC Investors Losing as Statists Forgo Earnings http://t.co/kuntGmOJ Worrisome trend, but political influence on firms tends 2b cyclical Mar 04, 2012
Why Japan Is Looking Good http://t.co/trw811WG Argues that QE weakens the yen, leading to better corp performance of f low valuation $$ Mar 04, 2012
London Is Eating New York?s Lunch http://t.co/UBEFijF7 London has a greater share of international transactions; New York too regulated $$ Mar 04, 2012
Politics
Romney campaign says losing nomination would take ‘act of God’ http://t.co/Q0VS1qRV Whom God would destroy, he first makes proud #hubris $$ Mar 07, 2012
Paralyzed Kids Employ Florida Lobbyists With Millions at Stake http://t.co/fmS5UIHu When there r damage caps, pleading 4 special exceptions Mar 07, 2012
Hoping for a deadlocked convention that turns to Huckabee, or someone like him http://t.co/OCRBjpXF Mar 03, 2012
@Nonrelatedsense I do not trust Romney, Santorum, or Gingrich. They change positions too easily. I may not like everything about Huckabee+ Mar 04, 2012
@Nonrelatedsense or Ron Paul, but they don’t shift their views as much. Huckabee would be acceptable to both wings of the GOP. $$ Mar 04, 2012
We’re in an interesting situation where most developed country governments are borrowing at a rapid rate, and their central banks are financing it.? Public old age retirement and health plans are underfunded.? Most major developed countries can’t grow rapidly, and there’s really nothing that can be done about it — competition from cheaper labor in developing countries is forcing developed country wages down.? We can’t grow out of the debt.
We wait for the tipping point.? When will investor sentiment change from believing debts will be paid in equivalent purchasing power, to believing that they will not get paid back in equivalent purchasing power terms?
Greece is past the tipping point.? Other nations in Europe teeter.? Is Japan nearing such a point?? They rejoice to see the Yen weakening as the BOJ finances the government deficit.? Be careful what you wish for, Japan — what is good in small, can become self-reinforcing if lenders lose confidence in the Japanese government.
Part of the trouble is with central banks repressing savers, deficits are considerably lower than they otherwise would be because short bond yields are low.? If rates rose, deficits would begin to rise gradually but distinctly in proportion to the maturity structure of the country.? That’s the tipping point.? There are only two states with an unstable equilibrium between them — government debt is trusted, and government debt is not trusted.
Now there is no simple answer here — how will the government react?
Raise taxes dramatically?
Cut spending dramatically?? Tell seniors that Medicare will no longer do what it used to?
Inflate the currency?
Default?? (Can make sense when a country does not need access to the debt markets.)
Try to drive a debt reduction deal, like Greece has done, and Argentina sorta did.
Each situation has a different best investment.? That’s a boon to governments, or disaster would have happened already.? Doubt as to policy blunts the rush to panic.? There may be worry but they don’t know what to do.
One more note: when one nation passes the tipping point, the question will be raised on other nations.? Imagine a world where many developed nations default on their debts.? There would be few certainties and silver and gold would likely become new currencies.
These are just some musings of mine; all sorts of kooky things could happen, but the pressure to use the five reactions listed above will be considerable globally.? Prepare as best you can; this one isn’t easy.
Most books that I don’t ask for are lousy.? This one isn’t, and I love the title, because it indicates the long hard slog that it is to persevere in investing. IT IS A BUSINESS!!? Without hard work it will not yield good results.? Indomitable means persistence, and a lack of persistence will give a bad result.
This is two books in one, and very well done.? The main part of the book explains risk and uncertainty in general terms, such that most people can understand it.? But for those that can deal with complex math, the latter part of the book offers a lot of additional firepower.